Dish Network 2015 Annual Report Download - page 43

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operating results could be adversely affected if the useful life of any of our owned or leased satellites were significantly
shorter than the minimum design life.
In the event of a failure or loss of any of our owned or leased satellites, we may need to acquire or lease additional
satellite capacity or relocate one of our other owned or leased satellites and use it as a replacement for the failed or lost
satellite, any of which could have a material adverse effect on our business, financial condition and results of operations.
Such a failure could result in a prolonged loss of critical programming or a significant delay in our plans to expand
programming as necessary to remain competitive. A relocation would require FCC approval and, among other things,
may require a showing to the FCC that the replacement satellite would not cause additional interference compared to the
failed or lost satellite. We cannot be certain that we could obtain such FCC approval. If we choose to use a satellite in
this manner, this use could adversely affect our ability to satisfy certain operational conditions associated with our
authorizations. Failure to satisfy those conditions could result in the loss of such authorizations, which would have an
adverse effect on our ability to generate revenues.
Our owned and leased satellites are subject to construction, launch, operational and environmental risks that could
limit our ability to utilize these satellites.
Construction and launch risks. A key component of our business strategy is our ability to expand our offering of new
programming and services for our DISH branded pay-TV business. To accomplish this goal, from time to time, new
satellites need to be built and launched. Satellite construction and launch is subject to significant risks, including
construction and launch delays, launch failure and incorrect orbital placement. Certain launch vehicles that may be used
by us have either unproven track records or have experienced launch failures in the recent past. The risks of launch
delay and failure are usually greater when the launch vehicle does not have a track record of previous successful flights.
Launch failures result in significant delays in the deployment of satellites because of the need both to construct
replacement satellites, which can take more than three years, and to obtain other launch opportunities. Significant
construction or launch delays could materially and adversely affect our ability to generate revenues. If we were unable
to obtain launch insurance, or obtain launch insurance at rates we deem commercially reasonable, and a significant
launch failure were to occur, it could impact our ability to fund future satellite procurement and launch opportunities.
In addition, the occurrence of future launch failures for other operators may delay the deployment of our satellites and
materially and adversely affect our ability to insure the launch of our satellites at commercially reasonable premiums, if
at all. See further information under the caption “We generally do not carry commercial launch or in-orbit insurance on
any of the satellites that we use, other than certain satellites leased from third parties, and could face significant
impairment charges if any of our owned satellites fail” below.
Operational risks. Satellites are subject to significant operational risks while in orbit. These risks include malfunctions,
commonly referred to as anomalies that have occurred in our satellites and the satellites of other operators as a result of
various factors, such as manufacturing defects, problems with the power systems or control systems of the satellites and
general failures resulting from operating satellites in the harsh environment of space.
Although we work closely with the satellite manufacturers to determine and eliminate the cause of anomalies in new
satellites and provide for redundancies of many critical components in the satellites, we may experience anomalies in the
future, whether of the types described above or arising from the failure of other systems or components.
Any single anomaly or series of anomalies could materially and adversely affect our operations and revenues and our
relationship with current customers, as well as our ability to attract new customers for our Pay-TV services. In
particular, future anomalies may result in the loss of individual transponders on a satellite, a group of transponders on
that satellite or the entire satellite, depending on the nature of the anomaly. Anomalies may also reduce the expected
useful life of a satellite, thereby reducing the channels that could be offered using that satellite, or create additional
expenses due to the need to provide replacement or back-up satellites. See disclosures relating to satellite anomalies set
forth under Note 8 in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K for further
information.